State turns profit on GE HQ sale

Company never tapped $25m in tax breaks

MAYBE LESS IS MORE in Fort Point.

Since announcing it would move to Boston in 2016, General Electric has scaled down the scope of its business, and on Thursday it sold off a 2.7-acre Boston property once slated to be part of the company’s headquarters.

The company will have a more modest presence than the 800-job headquarters complex outlined by the manufacturing and technology juggernaut three years ago, but the sale was profitable, the state recouped its investment, and GE is still establishing its headquarters in Boston.

The buyer is a team-up between National Development, a local outfit, and Alexandria Real Estate Equities, which has a track record of catering to life sciences businesses.

Catherine Carlock, the real estate editor of the Boston Business Journal, broke the story, noting that Alexandria has 4.5 million square feet of property in Greater Boston.

Jon Chesto, at the Boston Globe, spoke to Jay Ash, who helped broker the company’s move from Connecticut to Boston when he was Gov. Charlie Baker’s economic development chief, and Ash had a positive spin on the sale.

“In this case, the state is making money on its investment, and getting the GE headquarters at the same time,” said Ash, who now heads up the Massachusetts Competitive Partnership.

After the deal to bring GE to Boston was announced, there was criticism of the financial favors from the city and state as well an outcry over the promised support for a helipad that would enable GE executives to soar above the region’s transportation messes. The company has since tempered its enthusiasm for a helipad, and the deal that closed Thursday could quell Bostonians’ concerns about public dollars going to help a company that has gone years without owing federal income taxes. GE has a more sullied reputation in the Berkshires, where it polluted the Housatonic River near its old plant in Pittsfield.

MassDevelopment is making back the $87 million it spent on the property – which the Baker administration had said would be a value-add with or without GE – plus $11 million in profit. According to the Globe, GE had not tapped into the $25 million in tax breaks offered by the city of Boston and they don’t carry over to the next owner. The site that sold for $252 million is primed for development with 297,000 square feet of office space permitted.

Given all the congratulations bestowed on Baker and Boston Mayor Marty Walsh for wooing the company years ago, they might feel a little sheepish seeing their prize so diminished in stature.

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Andy Metzger

Reporter, CommonWealth magazine

About Andy Metzger

Andy Metzger joined CommonWealth Magazine as a reporter in January 2019. He has covered news in Massachusetts since 2007. For more than six years starting in May 2012 he wrote about state politics and government for the State House News Service.  At the News Service, he followed three criminal trials from opening statements to verdicts, tracked bills through the flumes and eddies of the Legislature, and sounded out the governor’s point of view on a host of issues – from the proposed Olympics bid to federal politics.

Before that, Metzger worked at the Chelmsford Independent, The Arlington Advocate, the Somerville Journal and the Cambridge Chronicle, weekly community newspapers that cover an array of local topics. Metzger graduated from UMass Boston in 2006. In addition to his written journalism, Metzger produced a work of illustrated journalism about Gov. Charlie Baker’s record regarding the MBTA. He lives in Somerville and commutes mainly by bicycle.

About Andy Metzger

Andy Metzger joined CommonWealth Magazine as a reporter in January 2019. He has covered news in Massachusetts since 2007. For more than six years starting in May 2012 he wrote about state politics and government for the State House News Service.  At the News Service, he followed three criminal trials from opening statements to verdicts, tracked bills through the flumes and eddies of the Legislature, and sounded out the governor’s point of view on a host of issues – from the proposed Olympics bid to federal politics.

Before that, Metzger worked at the Chelmsford Independent, The Arlington Advocate, the Somerville Journal and the Cambridge Chronicle, weekly community newspapers that cover an array of local topics. Metzger graduated from UMass Boston in 2006. In addition to his written journalism, Metzger produced a work of illustrated journalism about Gov. Charlie Baker’s record regarding the MBTA. He lives in Somerville and commutes mainly by bicycle.

Walsh has already endured some public ridicule for his track record of backing big endeavors that subsequently slip out of his grasp.

GE investors, who met for an annual meeting the day before the real estate news broke, sounded pleased by the company’s new direction under CEO Larry Culp, according to Bloomberg columnist Brooke Sutherland. Sutherland credited Culp with filling the company’s coffers with money from the sale of pieces of the business, but the column reported that GE still expects negative cash flow this year.